Exploiting Regulation Loophole, Goldman Sachs Gains Billions from Warehousing Aluminum
Goldman Sachs is making a killing off “a merry-go-round of metal.”
Through a subsidiary, Metro International Trade Services, Goldman operates 27 industrial warehouses in the Detroit area that house huge stores of aluminum belonging to various customers. But the operation involves more than just warehousing tons of metal.
A fleet of trucks moves the aluminum around each day from one building to the next “to exploit pricing regulations set up by an overseas commodities exchange,” according to an investigation by David Kocieniewski at The New York Times.
By shuffling the aluminum around, it increases the storage time and thus the amount Goldman charges manufacturers that use the metal, such as for soda cans or beer cans. According to the Times report, since Goldman bought Metro in 2010, the average wait time for customers to have their purchases located and delivered has grown from six weeks to sixteen months.
This “industrial dance” by Goldman and other financial players has cost American consumers more than $5 billion over the last three years, the newspaper found.
To Learn More:
A Shuffle of Aluminum, but to Banks, Pure Gold (by David Kocieniewski, New York Times)
- Top Stories
- Unusual News
- Where is the Money Going?
- U.S. and the World
- Appointments and Resignations
- Latest News
- Principal Deputy Director of the United States Mint: Who Is Rhett Jeppson?
- Coordinator of the Bureau of International Information Programs: Who is Macon Phillips?
- Acting Under Secretary of the Veterans Benefits Administration: Who Is Tom Murphy?
- Director of the American Institute in Taiwan: Who is Kin Moy?
- Acting Under Secretary of the National Cemetery Administration: Who Is Ronald Walters?